General Discussion and Whimsical Banter

mebu60

If the 'new' State Pension of £221.20pw for 24/25 is going up 4.1% then why is the 25/26 amount only £230.25 instead of £230.27? Is there an official rounding policy does anyone know? 

masonic

mebu60 said:

If the 'new' State Pension of £221.20pw for 24/25 is going up 4.1% then why is the 25/26 amount only £230.25 instead of £230.27? Is there an official rounding policy does anyone know? 

Have they rounded up from 4.091094032549728752%?

mebu60

masonic said:

mebu60 said:

If the 'new' State Pension of £221.20pw for 24/25 is going up 4.1% then why is the 25/26 amount only £230.25 instead of £230.27? Is there an official rounding policy does anyone know? 

Have they rounded up from 4.091094032549728752%?

Possibly, as it was the average earnings component of the triple lock that yields the not quite 4.1% rise  Though my letter from DWP explicitly states 'The State Pension will increase by 4.1% from 7 April 2025' before short-changing me. 

Not yet been ablet to find the source that defines the actual average earnings figure. 

poppystar

mebu60 said:

If the 'new' State Pension of £221.20pw for 24/25 is going up 4.1% then why is the 25/26 amount only £230.25 instead of £230.27? Is there an official rounding policy does anyone know? 

Not sure on their rounding policy but the weekly rates always end in 0 or 5 (as in the £221.20 and the 230.25) going back the last ten years at least.  So maybe rounding to the nearest 5p? 

poppystar

That 2p a week x 52 x the number of state pensioners means they’re saving probably in excess of £12m in the year! 

dales1

mebu60 said:

Not yet been able to find the source that defines the actual average earnings figure. 

It's the annual average earnings increase for May to July 2024. This was originally announced as 4.0%.

But in September / October 2024 the figure was revised to 4.1% (at great cost to the Treasury!).

Like you, I can't find an official announcement of the 4.1%.

eskbanker

poppystar said:

That 2p a week x 52 x the number of state pensioners means they’re saving probably in excess of £12m in the year! 

According to Royal London research in 2023, only about half of the (then) 3.5m recipients of the new state pension were on the full whack, so this specific rounding would probably only account for less than £2m, even allowing for more new pensioners since then.

Assuming the rounding is up or down, there's no particular reason to suspect that on average the other pensioners would be 'contributing' in the same way!

SnowMan

poppystar said:

mebu60 said:

If the 'new' State Pension of £221.20pw for 24/25 is going up 4.1% then why is the 25/26 amount only £230.25 instead of £230.27? Is there an official rounding policy does anyone know? 

Not sure on their rounding policy but the weekly rates always end in 0 or 5 (as in the £221.20 and the 230.25) going back the last ten years at least.  So maybe rounding to the nearest 5p? 

Yes that's right I think, it's rounded to the nearest 5p. If you start at £155.65 in 2016/2017 you can replicate all the subsequent years figures. So there's no bias to rounding up or down, it all cancels over time.

In excel you can use the following formula to so check it where A1 is the previous year figure and B1 is the percentage increase

=ROUND(A1*(1+B1)/5,2)*5

RG2015

poppystar said:

That 2p a week x 52 x the number of state pensioners means they’re saving probably in excess of £12m in the year! 

Good news for taxpayers then.

(Whimsical comment).

mebu60

SnowMan said:

poppystar said:

mebu60 said:

If the 'new' State Pension of £221.20pw for 24/25 is going up 4.1% then why is the 25/26 amount only £230.25 instead of £230.27? Is there an official rounding policy does anyone know? 

Not sure on their rounding policy but the weekly rates always end in 0 or 5 (as in the £221.20 and the 230.25) going back the last ten years at least.  So maybe rounding to the nearest 5p? 

Yes that's right I think, it's rounded to the nearest 5p. If you start at £155.65 in 2016/2017 you can replicate all the subsequent years figures. So there's no bias to rounding up or down, it all cancels over time.

MSE take note, nearest 5p. Spreading incorrect information in note(1) on first table stating 'State Pension payments are typically rounded up to the nearest 5p':
State pension set to rise by 4.1% and benefits by 1.7%